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Obama Administration Releases “A Strategy for American Innovation”

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Publication date:

13 October 2009

Number:

122

“Our vision of America’s future is one where prosperity is built by skilled, productive workers and sound investments that will spread opportunity at home and allow this nation to lead the world in the technologies, innovation and discoveries that will shape the 21st century” - Executive Office of the President

Last month the National Economic Council and the Office of Science and Technology Policy issued a 22-page document entitled “A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs.” This paper outlines the Obama Administration’s approach to rebuilding “a new foundation for durable, sustainable economic growth.”

“Restoring American leadership in fundamental research” is a key factor in promoting economic growth and quality jobs. The Administration’s strategy is presented as a three-tiered pyramid, the base of which is labeled “Invest in the Building Blocks of American Innovation.”Within this tier, in addition to fundamental research, are education and the creation of a world-class workforce, physical infrastructure, and the development of an advanced information technology ecosystem. The pyramid’s second tier, “Promote Competitive Markets that Spur Productive Entrepreneurship,” consists of export promotion, opening capital markets, encouragement of entrepreneurship, and improving public sector and community innovation. The third tier, “Catalyze Breakthroughs for National Priorities,” includes clean energy, advanced vehicle technologies, health care technology, and an interesting range of grand challenges. This FYI focuses on the pyramid’s first tier.

The document briefly describes the Administration’s concerns about the American economy. It has relied too heavily on unsustainable, bubble-driven, growth in the technology, housing, and financial sectors. This has resulted in “a short-term focus [which] has neglected essential fundamental investments,” in education, physical and technological infrastructure, health care costs, and continued dependency on fossil fuels. Of note, the report states:

Furthermore, we have compounded the problem by ignoring essential investments in high technology research that will drive future growth. Over the last four decades, Federal funding for the physical, mathematical, and engineering sciences has declined by half as a percent of GDP (from 0.25 percent to 0.13 percent) while other countries have substantially increased their research budgets.

A later section entitled “The Appropriate Role for Government” states the Administration’s approach to R&D funding:

the recent crisis illustrates that the free market itself does not promote the long-term benefit of society, and that certain fundamental investments and regulations are necessary to promote the social good. This is particularly true in the case of investments for research and development, where knowledge spillovers and other externalities ensure that the private sector will under-invest – especially in the most basic of research.

It later adds:

The true choice in innovation is not between government and no government, but about the right type of government involvement in support of innovation. A modern, practical approach recognizes both the need for fundamental support and the hazards of overzealous government intervention. The government should make sure individuals and businesses have the tools and support to take risks and innovate, but should not dictate what risks they take.

We propose to strike a balance by investing in the building blocks that only the government can provide, setting an open and competitive environment for businesses and individuals to experiment and grow, and by providing extra catalysts to jumpstart innovation in sectors of national importance. In this way, we will harness the inherent ingenuity of the American people and a dynamic private sector to generate innovations that help ensure the next expansion is more solid, broad-based, and beneficial than previous ones.

Under the heading “Examples of Successful Innovation Programs” the report states:

The Administration is committed to strengthening and focusing investments in our world-class nanotechnology research and development pipeline; targeting support for nanotechnology transfer and facilitating commercial start-ups; and cross-disciplinary training and education of scientists and engineers in the new-generation workforce. This will enable us to capitalize on our investments and stay at the cutting edge of this rapidly growing technology.

A later section of the report outlines the Administration’s policies to “Invest in the Building Blocks of American Innovation.” To “Restore American Leadership in Fundamental Research” states:

President Obama recognizes the fundamental role of government in fostering groundbreaking scientific and technological breakthroughs, and has committed resources and energy to ensure America leads the world in the innovations of the future.

Enact the Largest R&D increase in our nation’s history. With $18.3 billion in research funding, the Recovery Act is part of the largest annual increase in research and development in America’s history.

Double the R&D budget of key science agencies. The President’s Budget proposed to double the research budgets of three key science agencies: the National Science Foundation, the Department of Energy's Office of Science, and the National Institutes of Standards and Technology. These investments will expand the frontiers of human knowledge and create the foundation for the industries and jobs of the future, such as the convergence of bio, info, and nanotechnologies. The Obama Administration will increase the impact of this investment by providing more support for high-risk, high return research, for multidisciplinary research, and for scientists and engineers at the beginning of their careers.

Invest three percent of GDP in R&D. The President has proposed a goal that as a country, we invest more than three percent of our GDP in public and private research and development. This will exceed the level achieved at the height of the space race.

Make the R&E tax credit permanent. The President’s Budget includes the full $75 billion cost of making the research and experimentation tax credit permanent. This will provide businesses with the greater confidence they need to invest, innovate, and grow.

In a later section on education and the workforce, the strategy has six components, including:

Improve America’s Science, Technology, Engineering and Math (STEM) education. STEM education is particularly important to America’s future scientific progress and economic growth. As part of his effort to promote innovation in K-12 education, the President has challenged governors, philanthropists, scientists, engineers, educators and the private sector to join with him to dramatically improve achievement in STEM subjects. The President’s Race to the Top fund aims to reinvigorate the teaching of STEM in America’s classrooms and support advanced learning in these subjects, especially for women, girls and other underrepresented groups. The President is also committed to using the $4 billion Race to the Top fund to encourage states to put STEM at the center of their reform efforts. Finally, the Recovery Act provided a down payment toward the goal of tripling the number of NSF Graduate Research Fellowships in science and engineering.

And:

Improve the processing of high-tech visas. In order to maintain our role as a global leader and convener of scientific conferences and other gatherings, the Obama Administration has worked to ensure foreign scientists and technological leaders can visit the United States to participate in important events while continuing to protect sensitive technologies.

There are many other policy initiatives described in this 22-page Strategy. Also of interest are examples of eight “Grand Challenges” on the final page. The entire report can be accessed here.

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